Those looking to the Federal Reserve to navigate us through these tumultuous economic times will be sorely disappointed. The latest minutes from the August 9 meeting show deep divisions and a range of topics discussed, which is rare for the group that is unanimous in its decisions much of the time. While open discussion is good, it is not comforting to know that there are so many divisions as to what can be done to help the economy.
Here is a key snippet from the minutes:
“A few members felt that recent economic developments justified a more substantial move at this meeting, but they were willing to accept the stronger forward guidance as a step in the direction of additional accommodation. Three members dissented because they preferred to retain the forward guidance language employed in the June statement.â€
It is rare for so many on the committee to dissent, which shows just how divided things are in the venerable FOMC. This marked the first time in 20 years that so many members dissented. On the bright side, I suppose it is good that members are free to express their opinions, but we need clarity during these tough times, and we are not getting it from the Fed.
More QE? Ugh.
I find it disturbing that several members were in favor of another round of quantitative easing. Yesterday, Chicago Fed President Charles Evans appeared on CNBC and emphatically said that he supports it, which promptly sent gold prices through the roof once again. Will they not learn from the first two rounds? Risky assets were juiced, but it did literally nothing for the underlying economy except make it more expensive to fill up your car and to buy groceries.
The bottom line is that the Fed doesn’t have any more answers than we do, which is not exactly confidence-inspiring. Then again, many in the financial world lost their faith in the Federal Reserve years ago.
The Fed Seems Clueless is an article from: 
